Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1055 - HC - Income TaxCharitable activities - exemption u/s 11 - income derived from property held under the trust for charitable or religious purposes to the extent to which such income is "applied" to such purposes in India - payments made to the professors of Ohio University, USA for which the requisite provision was made in the books of account of the previous year, but actual payment was made in the next assessment year - Held that:- We are of the opinion that in view of the findings of fact recorded by the learned Tribunal that a provision was made to the Ohio University for charitable activity by way of education being imparted in India and the fact of the actual payment made to the Ohio University in the very next year and that too offered for taxation in India being undisputed, no such substantial question of law arises for our further consideration. Depreciation claim - the matter is squarely covered by a decision of the cognate Bench of this court in the case of CIT v. Society of the Sisters of St. Anne [1983 (8) TMI 44 - KARNATAKA HIGH COURT]wherein the cognate Bench of this court held that even the depreciation not involving any cash outflow is also in the character of expenditure and therefore such depreciation is nothing but decrease in the value of property through wear and tear, deterioration or obsolescence and the allowance made for that purpose in the books of account were deemed to be the application of funds for the purpose of section 11 of the Act. Allowing any expenditure of the earlier year which has been brought forward and set off in the year under consideration, is a justified finding of fact based on the correct interpretation of law and the judgment relied upon by it rendered by the cognate Bench. Therefore, the same does not call for interference. A similar view was also taken by the Division Bench of the Bombay High Court in CIT v. Institute of Banking [2003 (7) TMI 52 - BOMBAY HIGH COURT] wherein the Division Bench of the Bombay High Court held that the income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied, then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year. No substantial question of law - decided against revenue
|